2022 Was Good for Fire Service Industry; 2023 Is Uncertain

By Ed Ballam

The verdict is in: Many fire service business leaders feel that 2022 was way better than anticipated, but the forecast for 2023 is much less clear, clouded by the lingering effects of supply chain issues, inflation, and a tight labor market.

The specter of COVID-19 no longer looms large over the marketplace like it had for the previous two years, but the fallout continues to cast shadows.

Bolstered by pent-up demand for products and purchases delayed by the pandemic and fueled by extra money in the economy from the American Rescue Plan, some businesses experienced record gains and sales that far exceeded expectations. Those record sales have become a sort of double-edged sword, however, as challenges in getting materials and parts to build the apparatus and equipment exacerbate increasingly long lead times. Some feel the demand for equipment and apparatus will continue into next year, as will the supply chain and labor challenges, driving even longer lead times.

“The best, most honest thing I can say is next year is such a toss-up,” says Jerry Halpin, co-owner and vice president of sales and marketing for C.E.T. Fire Pumps. “I am tossing the coin every day trying to figure out what’s going to be happening next year. It seems as though I am waiting for something, a shoe to drop somewhere .… I can’t say with any historical certainty that next year will be worse or better, but I can make a guess.” And that guess in his mind is a slight downturn.

“In terms of how much of a downturn, I would be misleading people if I said I knew, but it will definitely be a downturn,” Halpin says. “I see lots of people speaking now in a much more cautious way.”

Here’s a look at what business leaders are saying about what 2022 was and what 2023 might look like through their eyes.

C.E.T. Fire Pumps

While Halpin says C.E.T. Fire Pumps had a good year from a sales point of view, 2022 was challenging for the business, as it suffered a devastating fire in March that wiped out its primary manufacturing facility. The business quickly recovered, leasing new space near the headquarters, and a new facility was under construction in the late fall.

Even with that setback, Halpin says 2022 was one of the best years out of the past five years. That’s why he figures the kind of demand C.E.T. experienced in the past can’t be sustained through 2023.

“It’s not possible that next year can be as good as this year, in my opinion,” Halpin says. “In terms of how much of a downturn, I would be misleading people if I said I knew, but it definitely will be a downturn. I see lots of people speaking now in a much more cautious way—that’s both the customer’s distribution and end users; they are all definitely more cautious.”

Halpin attributes the expected constriction in his business to uncertainty in the marketplace. He says many fire departments and emergency services providers can’t afford to gamble on making purchases for items they won’t receive for months or even years from now.

“That’s the inflation side of it,” he says. “People are getting really tired of the inflation thing, and when they come in for pricing, the first thing they say, almost exclusively, is, ‘How long is this price good for?’ We do the best we can as a manufacturer to say we believe we’ll be able to hold the price until a specified time .… They know it’s the truth to the best of our abilities, but they’re sick of hearing it. They have to plan purchases based on a budget, and it’s hard to budget when people are saying, ‘You know, six months from now, you may have to pay me 10 percent more.’ Well, there goes my budget.”

Inflation is just one factor in the uncertainty in the fire industry business, Halpin says, noting that, like all manufacturers, C.E.T. is subject to supply chain issues plaguing the planet presently.

“We have to pay attention to the world as it is right now, which is pretty upside down at the moment,” Halpin says. “It’s all about how people think .… If they are thinking negative, it’s going to be negative. If they’re feeling positive, it will be positive, and my sense is right now it’s very muted.”

From a business-to-business point of view, Halpin says people in the fire service industry are talking amongst themselves, looking for competitive edges to bolster opportunities through partnerships and other alliances. He’s not predicting anything “wild going on” with big mergers or acquisitions in 2023, but there will be cooperation between like businesses to gain an edge in the marketplace.

“They are looking to shore up opportunities for supplies on certain products,” Halpin says. “That’s about what I know. This is the kind of economy where you watch your Ps and Qs and you do not spend money on things unless you absolutely have to.”

P.L. Custom Body and Equipment Co., Inc.

P.L. Custom Body and Equipment Co. (PLCB) is the parent company of PL Custom Emergency Vehicles, Rescue 1, and New Jersey Emergency Vehicles, the makers of ambulances and rescue vehicles. It has been in business 77 years and Chad Newsome, the national sales manager for PLCB, has been in the business for three decades.

“In my 30-plus years of doing this work, I have never, repeat never, seen a market such as this,” Newsome says. “It truly is challenging for all involved.”

He says the predictions that were forecasted in 2021 for 2022 remain in the future. “We continue to see three major influences upsetting our industry,” Newsome says. “The first challenge is that the volatility in chassis availability, regardless of brand, makes production planning a constantly moving target.

“Second, component availability, coupled with drastic and ever-increasing price hikes, makes overall project pricing a monumental challenge,” he says. “And lastly, human capital—the workforce needed to meet the demands for today and tomorrow—is in scarce supply. Finding skilled labor, or training unskilled workers, is unbelievably hard these days.”

Newsome adds that there’s actually a fourth factor in the mix that exacerbates the first three. “Extremely strong order entry continues to outpace production capacity,” he says. “Conventional wisdom would welcome strong order intake; however, selling a product at today’s cost structure and building it 12, 18, 24 months, or longer out directly impacts your bottom line.”

Despite the uncertainties in the marketplace, Newsome says the company’s three operations divisions remain strong.

“This is due in large part to our long-term management team and well-cultivated tribal knowledge,” Newsome says. “This continuity has served us and our customers well. As we close in on the start of our 77th year, we have to remain true to our traditional business platforms, stay customer focused, and remain committed to our core proficiencies.”

Newsome predicts there will be “a reset within our industry and the economy in general,” and it is most likely to occur in 2023.

“Changes will, again, occur through more consolidations; mergers and acquisitions; and, in some cases, sudden departures by some companies,” Newsome says. “For PLCB, we need to remain true to our heritage and stay in our lane.”

REV Group

REV Group is the parent company of E-ONE, Ferrara, KME, Spartan Emergency Response, Spartan Fire Chassis, Smeal, and Ladder Tower. Rod Rushing is CEO of REV Group, and he says his company had a very strong 2022 for the fire apparatus division of the company.

“Our fire and emergency segment backlog at the end of the third quarter 2022 was $2,163.1 million, an increase of $933.6 million from the third quarter in 2021,” Rushing says. “However, we had a decrease in net sales compared to 2021, and this was primarily the result of shortages of key components, such as radiators, axles, and wiring harnesses, which meant a decrease in shipments.”

Rushing predicts advances in zero-emission fire apparatus will continue to be of interest to city fire departments and early adopters of the technology.

“We launched the VECTOR, the first North American-style fully electric fire truck at the Fire Department Instructors Conference (FDIC) in 2022, and we’re currently meeting with customers to explain the technology and benefits of our EV apparatus,” he says.

If COVID-19 continues to be a challenge in 2023, Rushing says REV Group is prepared to meet it. “One of REV Group’s core values is life safety,” Rushing says. “The safety of our team is our top priority, and we will continue to adapt to the challenges of COVID-19 should they continue.”

Of more relevant concern are the challenges left in the wake of the pandemic. “The challenge of key component shortages we experience in 2022, we expect this will continue in 2023 but will improve,” Rushing says.

Task Force Tips

Task Force Tips, a company with a strong focus on water flow products and other life safety equipment for the fire service, experienced growth in 2022 despite the supply chain challenges and long apparatus lead times that affected the market, according to Phil Gerace, TFT’s senior vice president sale and marketing.

“Fire departments have been quite interested in upgrading aging apparatus and water flow equipment, exploring new large-diameter hose (LDH) options, and adding products to help reduce firefighter cancer risk,” Gerace says.

Even with the challenges faced by all fire industry manufacturers, Gerace is encouraged by some of the signs he sees for 2023.

“I’m optimistic for the future because TFT is centered on supporting excellence in the fire service,” Gerace says. “We want to bring accurate information to help first responders make an informed decision about the solutions that are best for their unique department in terms of water flow, fluorine-free foam, and air decontamination.”

That doesn’t mean everything will be coming up roses for 2023, according to Gerace.

“Supply chain issues and long apparatus lead times will prolong into 2023, but I see signs of improvement,” Gerace says. “In terms of COVID-19, I believe the fire service will continue to focus on the overall health of the firefighter, not just deal with a particular virus. I hope that we’ll keep up the conversations about improving resources for mental and physical health as well as reducing the overall risk of cancer. The strength of the fire service isn’t new trucks or tools, it’s healthy first responders.”

Sutphen Corporation

Sutphen, a family-owned apparatus builder, saw growth in 2022 and expects that to continue into 2023, according to Zach Rudy, Sutphen’s director of sales and marketing.

“Business continued to soar for Sutphen throughout 2022,” Rudy says. “We are finding more and more people want Sutphen fire apparatus and our one-of-a-kind Sutphen experience. Our longstanding name and reputation resonate with the fire industry, and we are looking forward to 2023.”

Rudy says he expects “Sutphen’s momentum to extend into 2023 and well beyond. We’re looking forward to another year of cementing the Sutphen family name in the fire industry.”

Sutphen is not, however, completely immune from the challenges facing all the other manufacturers in the fire market, and Rudy acknowledges the “ripples of COVID are running their course across every industry and all business sectors.”

“But at the end of the day, Sutphen has been around over 132 years, and we’re ready for whatever challenges may arise in 2023,” Rudy says. “We have incredible family leadership at the helm and top-tier team members throughout the business, making us well-equipped to support the needs of the fire service, just as we have since 1890.”

W.S. Darley & Co.

Paul Darley, president and CEO of his family’s 115-year-old company, says the corporation has the largest backlog of pumps and other equipment in its history. He attributes that to strong apparatus sales.

“New orders for fire apparatus in North America were up about 35 percent in 2021 and another 30 percent in 2022, with just over 6,000 new apparatus sold this past year,” Darley says. “Some of this can be chalked up to pent-up demand from 2020 when COVID caused the market to decline about 10 percent from 4,500 fire apparatus sold in 2019.”

Darley says many orders are being accelerated due to inflationary issues and long lead times. “Some of the fire apparatus manufacturers are now quoting delivery in the year 2025 for new orders taken today,” he says.

It’s unlikely, however, that the market will continue to grow at this rate for 2023, and Darley predicts a market correction next year. “If new orders for fire apparatus were up over 10 percent in 2023, that would be a delightful surprise,” Darley says.

Darley echoes the challenges others in the fire service predict for 2023. “Every CEO I speak with cites three clear challenges now and into 2023,” he says. “Number one, supply chain; two, inflation; and three, labor, especially skilled tradespeople.”

Darley also further predicts interest rates will remain high “as long as our federal government continues to print money at an unsustainable rate.”

He also has one further dire prediction: “COVID-19 won’t be the last pandemic in the next decade, so we are staying nimble.”

Rosenbauer America

As other apparatus manufacturers have expressed, Rosenbauer experienced record apparatus sales in 2022, according to Mark Fusco, the president of Rosenbauer America.

“Fire departments have chosen to make key purchasing decisions this year, and we really have seen some extraordinary times,” says Fusco. “From a company perspective, we’re very thankful for what we’ve been able to accomplish.”

Fusco says the industry is on track to sell about 6,500 apparatus this year, and he attributes that to several factors. First, he says there may be a “hangover” effect from the COVID pandemic, where many fire departments couldn’t complete purchasing because of quarantine restrictions and other limitations. Another factor is Rosenbauer’s heavy investments in technology, Fusco says, noting that electric fire trucks, hardened technologies, and advanced electronic controls for aerials were all factors driving sales in 2022.

“We’ve certainly seen a strong 2022 and the million-dollar question is, will that type of demand level persist in 2023?” Fusco says, adding there are still a lot of unknowns that will influence the industry into at least the next year, including volatility in light commercial truck and component markets caused by supply chain instability.

And, like virtually every other business in the fire service industry, Fusco says inflation and supply chain issues will continue to have strong influences on Rosenbauer’s business into next year.

To hedge against those unpredictable factors in the marketplace, Rosenbauer has paid much closer attention to forecasting needs and working with component manufacturers to buy parts and pieces far in advance of when they are needed so they are in house when apparatus are built, Fusco says.

Also helping reduce long lead times is Rosenbauer’s ability to build not only its own cabs and chassis but its own pumps, having localized pump manufacturing at its plant in Minnesota, Fusco says.

“Rosenbauer, as a global group, has manufactured pumps longer than we have been building fire trucks,” Fusco says, noting that the company will still build apparatus with any pump preferred by the customer, but the addition of Rosenbauer’s proprietary pumps is another option that might be able to reduce lead times.

When it comes to combating the labor shortage, Fusco says Rosenbauer America has been progressive in finding talented people to meet the company’s production needs and plans to continue to do so in the future.

“We’ve started a lot of new development programs for talented individuals who don’t have a fabrication background,” Fusco says. “We’ve heavily invested in it in the past several years. We internally develop workers or, in many cases, immediately hire individuals out of a trades program or immediately out of school and develop their skills in heavy fabrication, electrical plumbing, and some of the other functions.”

Fusco says he hopes that component manufacturers, especially ones that deal with cab and chassis and drivetrain parts and pieces, will realize the importance of keeping safe and reliable apparatus on the road for firefighters and other first responders. He says the fire service industry needs to have some sort of priority in the supply chain when it comes to getting vehicles that save lives and property.

“We understand that demand may be up substantially across the board, but when it comes to protecting and serving the public, we need to ensure the availability of these emergency vehicles,” Fusco says. “That really needs to stay the headline. That really is something that needs to be understood by all businesses, OEMs, the legislature, state representatives—they all need to keep that at the top of mind and we need to be proactive and remind them of the necessity [fire apparatus] is serving.”

Fusco offers some advice for fire departments looking to make apparatus purchases soon and that is to contact dealers much sooner than later.

“Customers should work extremely closely with their dealers,” Fusco says. “Dial them up early and often.” He adds progressive fire departments will start the process of procuring apparatus far in advance of when the units will be needed to combat the long delivery times. Early decisions will also help battle against surcharges that might occur during the build times, although Fusco says some price hikes are beyond Rosenbauer’s control.

Fusco also says some dealers in the Rosenbauer network have been very good at predicting what customers want and have been ordering stock apparatus and making them available to customers, which is yet another way to reduce lead times—purchasing demonstrators or in-stock apparatus.

As a hedge against inflation, Fusco suggests fire department look at leasing options. “That may not be a typical option for many departments, but leasing might offer some more flexibility and allow the expenditure to be accounted for in a different way, “ he says.

Fusco also suggests fire departments look at consortium purchases, like those made through the Houston Galveston Area Council program, as a way to reduce expenditures and lead times.

“And that’s something we all want,” Fusco says.

Pierce Manufacturing

For Pierce Manufacturing, being agile and proactive has helped keep the apparatus builder thriving in challenging times, says Lisa R. Barwick, Pierce’s vice president of marketing/fire and emergency segment.

“Pierce’s sights are set on future growth and expanded capacity to support our customers’ integral work,” Barwick says. “As we continue to focus on developing the most advanced fire apparatus and technology, we’ve seen considerable increases in demand for our products.”

Barwick explains that Pierce is committed to serving its customers’ needs by focusing on expansion in several areas including Canada with the acquisition of MAXIMETAL of Quebec. Other projects include a 90,000-square-foot addition at its plant in Appleton, WI, and a 60,000-square-foot expansion to its Neenah, WI, facility. The company is also looking to expand its workforce by 200 new team members, Barwick says.

While 2022 may have been challenging, Pierce chalked up many wins, including celebrating the 300th sale of the 100-foot heavy-duty Ascendant tower, which has proven to be one of the most popular fire apparatus in its delivery show floor, Barwick says, noting that the third placement of Pierce’s Volterra electric pumper was also achieved in 2022.

“We look forward to continued development and evaluation to support municipalities’ sustainability initiatives for years to come,” Barwick says. “We are proud of the commitment and resilience of our team as we’ve taken an agile and proactive approach to keep critical products and service needs of our customers at the forefront of all we do,” she says.

And it’s resiliency that will help keep Pierce and the fire service moving into the new year, she adds.

“The fire service is resilient, and we believe we will collectively find ways to overcome these unprecedented rapid inflationary times,” Barwick says.

Barwick says among the many strengths Pierce has in the marketplace is its workforce, with employees marking 30-, 40-, and even 50-year anniversaries. She says Pierce hit its stride in the fire market 35 years ago and now a lot of those team members are looking forward to retirement.

“We’re seeing a generational shift in our workforce,” Barwick says. “In recent years, we’ve had a lot of young talent join our team, and we couldn’t be more pleased with this group’s determination, tech savvy, and dedication. However, we’re experiencing a current educational system that isn’t as focused on the trades, and our prediction is this will continue to be a challenge in the years ahead.”

To combat that human resource challenge, Barwick says Pierce has focused on creating educational pathways by working with local and regional technical schools to emphasize the importance of the trades in education.

Like many businesses, the labor and human resource shortage is just one difficulty Barwick says the company is facing.

“The past few years have amplified challenges for manufacturers, and we have had to identify new ways to manage our processes and continue building relationships with our customers,” Barwick says. “Recent supply chain challenges created inefficiencies that forced us to evaluate every single way we do business. We took standardized processes for granted, and our analysis revealed areas for improvement.”

Barwick continues, “In the face of adversity, you also learn who your partners are. We are immensely grateful to the suppliers who have remained diligent even in the face of their own adversity. In the year ahead, we’ll continue to pivot to become more efficient by closely reviewing our tier-two suppliers, in addition to our tier-one (main) suppliers, with a focus on nearshoring for accessibility of components.”

Barwick concludes, “We firmly believe what we’ve faced since the onset of the pandemic helped us become a stronger, more agile company. We’ve always been a company with a culture of caring, teamwork, and service to one another. This hasn’t changed; in fact, it has become stronger.”